U.S. Department of Housing and Urban Development
                              Washington, D.C. 20410-3000
 
                                   February 13, 1992
 
OFFICE OF THE ASSISTANT SECRETARY
FOR ADMINISTRATION
 
                                                     Ethics Letter 92-5
 
    Special Attention of:
                  All HUD Employees
 
    Subject:      Section 112 of the HUD Reform Act
                  "Requirements Governing the Lobbying of HUD Personnel"
 
         This Letter provides guidance to HUD employees on new legislation
    establishing standards under which:
 
    o    Persons that make expenditures to influence a HUD officer or
         employee in the award of financial assistance or the taking of a
         management action by the Department must keep records and report
         to HUD on the expenditures; and
 
    o    Persons that are retained to influence a HUD officer or employee
         in the award of financial assistance or the taking of a management
         action by the Department must register with HUD and report to HUD
         on their lobbying activities.
 
         Section 112 also places limitations on the fees that may be paid
    to consultants who are engaged to influence the award or allocation of
    the Department's financial assistance.
 
         The provisions of Section 112 are designed to improve the
    Department's ability to ensure that the process by which the Department
    awards financial assistance and takes management actions is conducted
    in a manner that is fair and open and free from improper influence.
 
                       To Whom Does Section 112 Apply?
 
         Section 112 covers the two players that are typically involved in
    efforts to influence the Department with respect to the award of
    financial assistance or the taking of management actions.  These are:
 
    o    Persons who obtain the services of another for this purpose; and
 
    o    Persons who provide the services
 
         For purposes of Section 112, "person" is defined as any
    individual, firm, partnership, society, State, or unit of general local
    government or other governmental entity. Expenditures made by an
    individual to influence a Departmental funding decision in his or her
    own behalf are not covered under Section 112.
 
    _______________________________________________________________________
     AE: Distribution: WA, FA
 
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                           What Does It Require?
 
     Each person who makes, or enters into an agreement to make, an
expenditure for the purpose of influencing a Departmental decision must
keep records of each agreement and each expenditure.  Expenditures which
total $10,000 or more during a calendar year must be reported to the
Department,
 
     Each person who is retained to influence a decision by HUD must
register with the Department not later than 14 days after being retained
for such purpose.  If the person's total compensation for efforts to
influence a Departmental decision is $10,000 or more during a calendar
year, he/she must report this information to the Department in the
following year.
 
                   What Are The Penalties for Non-Compliance?
 
     The Secretary may impose a civil money penalty on any person who fails
to register under Section 112 or who knowingly fails to file a required
report.  The amount of the penalty may not exceed:
 
o    $10,000 for each violation, or;
 
o    The total amount received for any services performed for any applicant
     to which the violation relates.  This is in addition to any other
     available civil remedy or criminal penalty that may be imposed.
 
               What Are My Responsibilities As a HUD Employee?
 
Neither the Act nor the implementing regulations require HUD employees who
are the targets of lobbying communications to ensure compliance with the
Act.  A HUD employee who has information to suggest a registration or
reporting violation of Section 112, should promptly report suspected
violations to his/her supervisor or directly to the Office of Ethics or the
Inspector General (IG).
 
            Where Can More Information About Section 112 Be Obtained?
 
The provisions of Section 112 of the HUD Reform Act are contained in 24 CFR
Part 86. Detailed guidance is available in the Office of Ethics, Room 2158.
To discuss specific concerns about the registration and reporting
requirements, you should call 708-3815 (TDD/Voice) or FTS 458-3815.
 
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Office of Ethics                  Page 2                Ethics Letter 92-5